Interesting report done as part of M.Sc degree by student of DA-IICT (Dhirubhai Ambani Institute of Information and Communication Technology) Its a report of how SEWA is working as part of castor seed procurement supply chain with Jayant Agro Organics.
SEWA is a trade union registered in 1972. It is an organization of poor, self-employed women workers. These are women who earn a living through their own labor or small businesses. They do not obtain regular salaried employment with welfare benefits like workers in the organized sector. They are the unprotected labor force of our country. Constituting 93% of the labor force, these are workers of the unorganized sector. Of the female labor force in India, more than 94% are in the unorganized sector. However their work is not counted and hence remains invisible. In fact, women workers themselves remain uncounted, undercounted and invisible. SEWA’s main goals are to organize women workers for full employment. Full employment means employment whereby workers obtain work security, income security, food security and social security (at least health care, child care and shelter). SEWA organizes women to ensure that every family obtains full employment. By self reliance we mean that women should be autonomous and self-reliant, individually and collectively, both economically and in terms of their decision-making ability.
In rural India, agriculture and allied industrial sectors employ as much as 89.5% of the total female labor. In overall farm production, women's average contribution is estimated at 55% to 66% of the total labor.
Brief description of RUDI
RUDI was initiated by Self Employed Women’s Association (SEWA) in 2004.RUDI Multi Trading Company Limited has been established in 2007 with an objective to internally generate funds for the rural producer groups. This will enhance the quality, capacity and efficiency of production through the use of better technology. Eventually it will result in scaling up the profit margins by way of bulk procurement and a well organized sales and distribution network. The profits will be shared by the members of the rural Self-Help Groups and Farmer’s Association, which will bring a positive change in the economic condition of the marginal farmers and workers who are struggling to survive and are below the poverty line.
The company would enable direct promotion and marketing of the agro commodities procured through Farmer’s Association in the rural retail network of farmers and agriculture laborers across all the villages of 14 districts of Gujarat. RUDI Company also enables multiple employment opportunities, reduce incidental expenses, availability of good quality agricultural & non-agricultural products to the rural consumers at affordable prices and required quantity, elimination of middlemen, better earning for the producers and thereby socio economic development of the underprivileged rural people.
About castor crop:
Castor is a plant that is commercially very important to the world. Castor seed oil cake is very useful manure to crops. It is a very good fertilizer alternative containing optimum levels of Nitrogen, Phosphorous and Potassium which is suitable for cultivation of Paddy, Wheat, Maize and Sugarcane. Castor Oil’s application range is very wide‐the uses range from cosmetics, paints, synthetic resins & varnishes, to the areas of national security involving engineering plastics, jet engine lubricants and polymers for electronics and telecommunications.
Gujarat is the leading state in castor seeds production in India followed by Rajasthan and Andhra Pradesh. Gujarat contributed 71% of the total production of castor seed in India in 2007‐08, followed by Rajasthan at 16%, Andhra Pradesh at 9% and other states sharing 4% Mehsana and Banaskantha is the largest castor producing districts in Gujarat. In Gujarat castor cultivation comes from 6 districts of North Gujarat, viz., Mehsana, Banaskantha, Sabarkantha, surendranagar, Patan and Kutch.
Role of SEWA:
SEWA has its own district office in nine district of Gujarat. Surendranagar district association has 232 groups of farmers. Each farmer group has usually 10-20 members. Majority of the members are women. The main work of these groups is to provide small farmers, a village level platform from where they can sell their products. It helps small farmer to get appropriate money for their products because
it save their transportation cost to the market and bargaining rates of market. In this way the rural women and small farmers works and get mutually benefitted as farmer association share profit with the company where SEWA has a tie-up and farmers get money at their home.
Castor Production in Dhrangadhra block:
There are 8000-9000 members of Sewa district association from different village of Dhargadhra. They visit all villages of different blocks and ask farmer to sell their castor to them. They buy castor or at the appropriate rates and then procure it. Once the procurement process gets finished then by the help of local labor they make it clean, package it and make the castor load on the company truck. The procurement is determined by SEWA headquarter at Ahmadabad. They keeps inform everyday to their district associations about daily castor rates. When member of farmers group go for procurement they already know about today’s rate of castor as they have been already informed by Company main headquarter at Ahmadabad , so before purchasing they keep two things in their mind, first that today’s rate of castor and second quality of castor. The price is usually fixed but can be negotiable at good quality of castor product.
They purchase castor according to the quality because the company to whom they sell it have certain criteria for quality standard determination. If one bag of castor doesn’t have weight of 75.2 kg of weight they don’t give same rate that was fixed earlier. So it becomes members of farmer group responsibility to purchase castor of good quality and package it well.
Jayant Agro-organic ltd. (The Company)
Jayant Agro-Organics Limited is an emerging global oleo chemical company with leadership in the castor-based specialty chemicals industry. With proven research capabilities, strict adherence to stringent quality controls conforming to International Standards and flawless record of honoring delivery schedules it is no wonder that Jayant Agro-Organics Ltd. is the preferred partner of choice worldwide for sourcing of castor oil and castor oil derivatives. With the long-term approach we have adopted to the industry it is no wonder that we balance your requirement equations not only chemically but also economically.
This company has a tie-up with SEWA. They purchase castor in a bulk amount from farmers group. They give 2% of total sell, means if farmer group sell castor of cost 1lakhs in a day then they will get 2000 Rs. In Surendranagr district association, they sell 20 ton/day means, they sell castor of worth 650,000 Rs, and if price rate of castor is 650/20kg means they will get 13,000 Rs. The 1.25% of this amount goes to SEWA’S district association and remaining 0.75% goes to SEWA main headquarter in Ahmadabad.
PN: I have deleted a portion of the document to make it more readable.. but the document itself is worth reading .. It also provides us an idea about how well entrenched Jayant is with its non standard supply chain involving NGO and farmers directly.. and giving them a market determined price.
This information could be detrimental for Jayant agro as competitors could also enter into similar agreements ..but my personal view is a company is more than just one part .. its how the whole organization works together as a team that makes a difference.. Jayant at CMP: 105/= is a great stock to buy.. deep value and a multibagger on long term basis..
Quarter ending March 2014 according to my estimates, Jayant Agro Organics is scheduled to report anywhere between 450-550Cr of sales (consolidated)
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